Cordoba Minerals and High Power Exploration to Consolidate the San Matias Project to Create a Leading Copper-Gold Company in Colombia Cordoba Announces Concurrent Bought Deal Equity Financing
Cordoba Minerals and High Power Exploration to Consolidate the San Matias Project to
Create a Leading Copper-Gold Company in Colombia
Cordoba Announces Concurrent Bought Deal Equity Financing
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
TORONTO, CANADA, June 13, 2017: Cordoba Minerals Corp. (“Cordoba” or the “Company”)
(TSX-V: CDB) is pleased to announce that it has entered into a definitive agreement (the
“Agreement”) with High Power Exploration Inc. (“HPX”), whereby Cordoba will acquire (the
“Transaction”) HPX’s 51% interest in the San Matias Joint Venture (“San Matias”) through the
acquisition of HPX Colombia Ventures Ltd. (“Ventures”), a wholly-owned subsidiary of HPX, for
consideration of 92,681,290 Cordoba common shares (the “Consideration”).
In connection with the Transaction, Cordoba has entered into an agreement with BMO Capital
Markets, acting as bookrunner on behalf of a syndicate of underwriters (collectively, the
“Underwriters”), pursuant to which the Underwriters have agreed to purchase for resale, on a
bought deal private placement basis, 12,346,000 subscription receipts (the “Subscription
Receipts”) of Cordoba at a price of C$ 0.81 per Subscription Receipt for gross proceeds to
Cordoba of approximately C$10 million (the “Concurrent Financing”). The net proceeds of the
Concurrent Financing will be used to fund exploration expenditures at San Matias , to repay up
to C$1.5 million of HPX expenditures that are not being converted into Units, and for general
corporate purposes.
Transaction and Concurrent Financing Rationale
Cordoba to become the operator and 100% owner of the highly prospective San Matias
copper-gold project in Colombia;
Transaction allows Cordoba and HPX to simplify the current investment and shareholding
structure to unlock value;
Transaction is n eutral for HPX from the perspective of its current San Matias ownership –
HPX will exchange its current ~69% controlling economic interest in San Matias (consisting
of a 51% direct stake in San Matias and a 36% ownership interest in Cordoba) for a ~69%
ownership interest in Cordoba (pre-financing);
Concurrent Financing will broaden Cordoba’s shareholder investor base , fund Cordoba ’s
work program for the next 12 months, and result in a pro forma ownership interest of
approximately 67% for HPX;
Increased market capitalization and improved capital markets profile is expected to enhance
Cordoba’s trading activity and liquidity; and
Cordoba to benefit from the continued support of Robert Friedland, and from HPX as the
controlling shareholder.
Mario Stifano, President and Chief Executive Officer of Cordoba stated, “The consolidation of
San Matias is a unique opportunity for Cordoba shareholders as it positions the Company
favorably to continue advancing the highly prospective San Matias district as the 100% owner of
the project, rather than as a minority joint -venture partner. We believe this transaction has the
potential to unlock significant value for shareholders both in the near-term and longer term.”
Robert Friedland, Co-Chair and Chief Executive Officer of HPX , added, “We are delighted to
strengthen our ongoing partnership with Cordoba as the c ompany embarks on realizing the
promise of the San Matias Copper Gold P roject for all stakeholders. We see tremendous
mineral potential in Colombia , and Cordoba now is better positioned to explore its extensive
land package and to acquire additional prospective projects in Colombia in keeping with its goal
of becoming the leading copper-gold exploration company in the country.”
Transaction Overview
The Consideration will be paid to HPX on closing of the Transaction and will consist of the
issuance by Cordoba of 92,681,290 Cordoba common shares, such that HPX will convert its
existing 51% direct economic interest in San Matias to a 51% direct economic interest in
Cordoba. Combined with HPX ’s existing 36% ownership interest in Cordoba, HPX will hold a
combined 69% ownership interest in Cordoba prior to the Concurrent Financing. In addition,
Cordoba will issue 12,364,623 Units (as defined below) to HPX at a deemed price of C$0.81 per
Unit, that being the same price as the Concurrent F inancing, to compensate HPX for
approximately C$10 million of HPX joint venture expenditures incurred by HPX in connection
with the San Matias property since November 10, 2016, when HPX earned a 51% interest in
San Matias.
Cordoba’s board of directors (the “Board”), with certain interested directors abstaining, has
unanimously approved the Transaction and recommends that Cordoba shareholders vote in
favor of the Transaction. All of the d irectors and officers of Cordoba who are not interested in
the Transaction or related to HPX , who own approximately 2.1% of Cordoba’s issued and
outstanding shares, have agreed, among other things, to support the Transaction and vote their
Cordoba shares in favor of the Transaction.
As required by the TSX Venture Exchange (the “TSX-V”) and Multilateral Instrument 61 -101 –
Protection of Minority Security Holders in Special Transactions, Cordoba will seek minority
shareholder approval of the Transaction, including the issuance of the Cordoba common shares
and Units in connection with the Transaction. Further information regarding the Transaction will
be contained in a management information circular that Cordoba will prepare and file in due
course in connection with a n annual and special meeting of Cordoba shareholders, which is
expected to be held in July, 2017. Closing of the Transaction is expected to occ ur shortly
thereafter.
The Board , with interested directors abstaining, based in part on the recommendation of the
Special Committee (as defined below), has unanimously determined that the proposed
Transaction is fair and in the best interests of the Comp any and will recommend that
disinterested shareholders vote in favor of resolutions supporting the Transaction.
Copies of the Agreement, which includes the form of Investment Agreement (as defined below),
and the form of support agreement, and certain related documents will be filed with securities
regulators and will be available under Cordoba’s profile on SEDAR at www.sedar.com.
Investment Agreement
Upon closing of the Transaction, subject to certain conditions set out in an investment
agreement (the “Investment Agreement”) to be entered into between Cordoba and HPX , HPX
will have certain Cordoba board nomination rights (described below) and the right to participate
in any future equity offerings completed by Cordoba in order to maintain its pro rata ownership
in Cordoba.
Following completion of the Transaction, the Board is to be comprised of seven directors with
HPX being entitled to nominate four of those directors, with at least one of such nominees being
independent. The Investment Agreement provides for HPX ’s nominees to the Board to be
reduced to less than a majority of the directors if HPX’s ownership interest in Cordoba is diluted
to below 50%, with further proportional reductions thereafter.
HPX has also agreed to not sell or transfer any of the Consideration or the securities comprising
its Units for a period of at least 180 days following the closing of the Transaction.
HPX’s entitlements under the Investment Agreement will remain in place as long as HPX ’s
ownership interest in Cordoba remains at or above 10% of the issued and outstanding shares of
Cordoba.
Concurrent Financing
In connection with the Transaction, Cordoba has entered into an agreement with BMO Capital
Markets, acting as bookrunner on behalf of the Underwriters, to complete the Concurrent
Financing.
The gross proceeds from the Concurrent Financing, less the expenses of the Underwriters , will
be deposited and h eld in escrow and shall be released immediately prior to the completion of
the Transaction upon the satisfaction of certain conditions (the “Release Conditions”) or upon
the termination of the Agreement.
Each Subscription Receipt will entitle the holder t hereof to receive one unit (a “Unit”), with each
Unit consisting of one Cordoba common share and one -half of one Cordoba common share
purchase warrant (each whole common share purchase warrant, a “Warrant”) for no additional
consideration or further action on the part of the holder thereof upon satisfaction of the Release
Conditions. Each Warrant will entitle the holder thereof to acquire one Cordoba common share
at an exercise price of C$1.08 for a period o f 24 months from the closing of the Concurrent
Financing.
If the Release Conditions are not satisfied prior to September 29, 2017, or the Agreement is
terminated pursuant to its terms, the escrow agent will return to the holders of the Subscription
Receipts an amount equal to the aggregate purchase price paid for the Subscription Receipts
held by them, together with a pro rata portion of interest earned on the escrowed proceeds and
the Subscription Receipts will be cancelled and be of no further force or effect.
The Subscription Receipts will be distributed by way of a private placement in each of the
provinces and territories of Canada and may also be sold in the United States pursuant to
applicable exemptions.
The Company has also granted the Underwrit ers an option, exercisable until 48 hours prior to
the closing date of the Concurrent Financing, to purchase at the offering price up to an
additional C$3 million of the Subscription Receipts purchased in the Concurrent Financing.
Closing of the Concurrent Financing into escrow is expected to occur on or about July 11, 2017
and is subject to certain conditions, including the receipt of all necessary regulatory and stock
exchange approvals, including approval of the TSX-V.
Conference Call
Cordoba will host a conference call on Wednesday, June 14, 2017 at 1:00 pm EDT to discuss
the details of the Transaction.
The telephone numbers for the conference are toll-free 1-800-319-7310 and 416-915-3227 and
the Guest Code is 25381#.
Advisors
The Board a ppointed a committee of independent directors (the “Special Committee ”) to
review and assess the Transaction. Haywood Securities Inc. ( “Haywood”) is acting as a
financial advisor to the Special Committee. Haywood has provided the Special Committee with
an opinion, subject to the assumptions and limitations contained therein, that the consideration
to be paid by Cordoba pursuant to the Transaction is fair , from a financial point of view , to
Cordoba. Cassels Brock & Blackwell LLP was retained as legal advisor to the Company and the
Special Committee. Stikeman Elliott LLP acts for HPX.
About Cordoba Minerals:
Cordoba Minerals Corp. is a Toronto -based mineral exploration company focused on the
exploration and acquisition of copper and gold projects in Colombia. Cordoba has a joint
venture with High Power Exploration on the highly prospective, district -scale San Matias
Copper-Gold Project located at sea level with excellent infrastructure and near operating open -
pit mines in the Department of Cordoba. For further information, please visit
www.cordobaminerals.com.
About High Power Exploration (HPX):
HPX is a priva tely owned, metals -focused exploration company deploying proprietary in -house
geophysical technologies to rapidly evaluate buried geophysical targets. The HPX technology
cluster comprises geological and geophysical systems for targeting, modelling, survey
optimization, acquisition, processing and interpretation. HPX has a highly experienced board
and management team led by Co -Chairman and Chief Executive Officer Robert Friedland,
President Eric Finlayson, a former head of exploration at Rio Tinto, and co -chaired by Ian
Cockerill, a former Chief Executive Officer of Gold Fields Ltd. For further information, please
visit www.hpxploration.com.
ON BEHALF OF THE COMPANY
Mario Stifano, President & CEO
Cordoba Minerals Corp.
Email: [email protected]
Website: www.cordobaminerals.com
Forward-Looking Statements
This news release includes certain “forward-looking information ” within the meaning of Canadian
securities legislation. Forward -looking statements include predictions, projections and forecasts and are
often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”,
“estimate”, “forecast”, “expect”, “potential”, “project”, “target”, “schedule”, budget ” and “intend” and
statements that an event or result “may”, “will”, “should”, “could” or “might” occur or be achieved and other
similar expressions and includes the negatives thereof. All statements other than statements of historical
fact included in this release, including, without limitation, statements regarding the Transaction, including
the Concurrent Financing, and with respect to the closing, costs and benefits of the Transaction and the
Concurrent Financing are forward -looking statements that involve various risks and uncertainties. The
timing and completion of the Transaction and the Concurr ent Financing are subject to customary closing
conditions and other risks and uncertainties including, without limitation, required regulatory and
shareholder approvals. Accordingly, there can be no assurance that the Transaction and the Concurrent
Financing will occur on the timetable or on the terms and conditions contemplated in this news release.
The Transaction could be modified, restructured or terminated. Forward -looking statements are based on
information available at the time they are made, underly ing estimates and assumptions made by
management and management ’s good faith belief with respect to future events, performance and results,
and are subject to inherent risks and uncertainties surrounding future expectations generally, which could
cause act ual results to differ materially from what is currently expected. Such risks and uncertainties
include, but are not limited to, changes in project parameters as plans continue to be refined, future metal
prices, availability of capital and financing on acc eptable terms, general economic, market or business
conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and
other exploration or other risks detailed herein and from time to time in the filings made by the Co mpany
with securities regulators. Although the Company has attempted to identify important factors that could
cause actual actions, events or results to differ from those described in forward -looking statements, there
may be other factors that cause such a ctions, events or results to differ materially from those anticipated.
There can be no assurance that forward -looking statements will prove to be accurate and accordingly
readers are cautioned not to place undue reliance on forward -looking statements which speak only as of
the date of this news release. The Company disclaims any intention or obligation, except to the extent
required by law, to update or revise any forward -looking statements, whether as a result of new
information, future events or otherwise.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada
accepts responsibility for the adequacy or accuracy of this release.